Funny to see this post here, since I'm in Buenos Aires for the week, for vacations.
I didn't know about that "blu dolar" rate before coming, so I didn't bring any cash with me; I literally had 50$usd, used to pay the taxi from the airport to my Airbnb when I arrived, and then had my friend become crazy when she saw me use my american VISA to pay for things. "You're crazy, it's almost twice as expensive this way!".<p>But it was too late, I didn't have any cash, and no way for me to get any USD - nor getting the black market rate through my credit card. (official rate is 5.88ars/usd, the blue dolar is ~10).<p>Luckily enough, I started to buy bitcoins a few weeks ago, and for the same reasons the "blu dolar" exists here, bitcoin transactions in person/cash are really valued here, because you can guess, it is also really hard/expensive for Argentinians to buy bitcoins online (because of the rate/price of doing bank transfers in USD).<p>So thanks to that, I was able today to arrange a cash transaction through localbitcoins.com - allowing me to sell a few bitcoins at the market price, in Argentinians Pesos, to the "blu rate"!
Venezuela's official rate has been about 1/5 of the black market rate for many years. I remember my wife shooing me into a corner at the airport while she traded dollars for bolivares with the security guards.<p>The differential has caused all kinds of effects. Plane tickets are hard to come by because so many people take advantage of the spread by flying somewhere, buying goods at official, returning for cash then trading at black market. An investment of as little as 500 usd pays for the trip and then some. Officially this does not exist but searching for mercado lechuga (lettuce market) shows a thriving ecosystem.
All self-inflicted wounds. Argentinians <i>could</i> have a stable currency and a thriving, functional economy - there's nothing structural that's stopping them. But they choose not to, and have been making this choice for they last 100 years or so. It's a true pity.
Half of my family is from Buenos Aires and I often go back to visit. It's crazier than you think over there.<p>Not too long ago they made it illegal and very difficult for any Argentinean to take out their own money from the ATM. The government is trying really hard to keep everyone inside the country and only spend money within the country.<p>So for anyone visiting Argentina anytime soon, bring as many US dollars as possible. It almost makes traveling in the country cheap if you black market exchange it. It basically doubles your money.
This black market the <i>arbolitos</i> (literally "little trees", a joke on individuals selling "green bills" ergo leaves, you get the point) has existed for decades and comes and goes whether currency exchange controls go up.<p>The real black market is the hidden one, the one where millions are moved every day. Just because members of government banned currency exchange doesn't means they and their friends can't buy dollars or other foreign currency, and they do, sometimes subsidized by the government given that they buy at the official rate which is near half that of the real market rate.<p>The only thing keeping this disaster from graduating to hyperinflation is the fact that for the first time in 100 years Argentine exports are back in high demand, back then it was the British and French, now is the Chinese and Indians buying Argentine food products. That source of foreign currency feeds the vaults of the central bank allowing the current government to keep this Jenga-economy from falling apart, let alone stuff their pockets.<p>Ironically 100 years ago Argentina used that money to build its industry, fund the arts, providing top-level education to the population and build its infrastructure, all with the best of the best. Today this new money is being squandered by a government so corrupt it dwarfs even the worst of the early 20th century Argentine elite. The irony is that Argentina is building nothing today, in fact most of the country still lives everyday using the (now decrepit due to age and lack of maintenance) infrastructure created in those days (or with the wealth from those days) meaning this time it will not only repeat the same mistake of depending too much on primary exports but it will leave nothing for future generations.
Argentina's currency black market is just an acknowledgement of the actual price of the Peso that countries in the border have. You can LEGALLY exchange 1 US dollar for about 10 ARS in Uruguay <a href="http://www.bcu.gub.uy/Paginas/Default.aspx" rel="nofollow">http://www.bcu.gub.uy/Paginas/Default.aspx</a>
I've been living in Buenos Aires for over 4 years now. The secret for infinite money basically is selling Bitcoins to USD and then selling the USD to Ar$ Pesos.<p>Right now 1 USD = 10.10 Ar Pesos.<p>Here are some references:<p>1 Bus ticket from 1.50 to 3 Pesos.<p>1 Bic Mac about 45 pesos.<p>1 Coca Cola 8 or 9 pesos.<p>1 Dinner in a medium to fancy restaurant 150 pesos (200+ if you drink wine).<p>If any hacker is in town, let me know.
Why would you trust a government that rigs their inflation figures in such a drastic way that their economists simply refuse to sign for it? If you want people to trust your currency you shouldn't treat them as fools and get the inflation back to more sane levels of 10% or less.
At various locations, large value foreign bills can be exchanged at a rate significantly above the market here in Bangkok. (Obviously, normally a physical exchange business buys below and sells above. In this case they buy above... presumably because certain clients they onsell to want a physically compact means of storing or transmitting a internationally recognized, relatively (to local currency) stable store of value in a semi-anonymous way.)
I work for a company that does casino/gaming equipment, we recently had to upgrade a cruise-liner that allowed to use onboard credit on the casino floor.<p>Apparently the biggest concern for the staff working on the casino floor was the Argentinean problem. The would take the biggest credit that they could get (this would create net account liquidity problems for the casino department etc).<p>I wanted to look up what the deal was and forgot until this article.
By the way, this not only applies to Dollars, but also to other currencies like Euros (Although we barely buy those, since we don't need them).<p>We also have problems buying online, for example, if I buy something on Steam, since the money is going outside of the country, I have to pay 20% more in taxes (I think that's the correct number) although we get the official dollar price.
One incredible inconsistency is that credit card companies have to pay their clients'debts in dollars, but have to abide by the central's bank currency rate.<p>For a few months people were going to uruguay and get cash advances on their credit cards, then go back to argentina and sell those dollars. They could make 2-3k pesos per credit card that way, which is basically a minimum wage. In a single day.<p>Lots of restrictions were made to prevent this, but the issue still applies.<p>The saddest part of this office is their lack of understanding of economics and Gresham's law. At this pace it is unavoidable that dollars will flee the country because no-one that can keep dollars instead of pesos will.<p>Honestly, the dollar being 10 pesos is insane. 2 years ago the peso was 4.11 to the dollar. Not to mention that public officials know all the illegal market places and dont shut them down, pointing to a large corruption scheme.
I'm wondering about some of these citations:<p>--SNIP--<p>According to the latest figures, Argentina's Central bank is losing US$ 47.5 million each day from their international reserves. This is the same as US$ 8 million every hour.<p>-- SNIP --
Some argentinians are also using bitcoins to deal with the inflationary peso: <a href="http://www.youtube.com/watch?v=e__m-w4N7NI" rel="nofollow">http://www.youtube.com/watch?v=e__m-w4N7NI</a><p>There is also this post with some more details around how the black dollar market works in Argentina.
<a href="http://thebluemarket.wordpress.com/2012/10/18/bitcoin-dollars-and-pot-banging-protests-in-argentina/" rel="nofollow">http://thebluemarket.wordpress.com/2012/10/18/bitcoin-dollar...</a>
Venezuela, Iran and Egypt also have massive currency Black Markets due to similar troubling economic and political undercurrents. Some of Argentina's figures are very surprising!
Yes, in Argentina we have different dollar/peso parities, the most popular are
"Dólar blue" $9,93 per dollar.
"Dólar tarjeta" (Credit card, +20% over official exchange rate) 5.89*1,20=$7,068 per dollar.
"Conta con Liqui" (local stock market and Wall Street arbitrage) $9,35 per dollar.
The situation is simple and tragic.<p>Rather than implementing an honest tax, so that they can pay off foreign debt, the government fixes the exchange rate so that it can pay of its debt for cheaper. However doing so is effectively a hugely distortionary tax on its own citizens.
The Barter (Trueque) Markets in Argentina is also an interesting parallel economy. I'm not sure if they're still happening, though.<p><a href="http://www.youtube.com/watch?v=dsn_cCXHAvE" rel="nofollow">http://www.youtube.com/watch?v=dsn_cCXHAvE</a>
Some people in DC should read this blog post and maybe then, they will start to double thing this whole thing about gov shutdowns, debt ceilings, and the actual harm it can do to the "confidence" in our $$